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For Employees

Kristen Prinz
In Insights

Should You Try to Negotiate Your Severance?

Reading Time: 3 minutes

We have all been hearing a lot about tech layoffs and mass reductions in force (RIFs). Luckily, the labor market is tight, and unemployment is low. But even with the assurance that there are a lot of opportunities out there, being pushed out of a job can be difficult and uncertain.

Leaving a job with some cushion helps separated employees bridge a gap to new employment, minimizes the stress of unemployment, and engenders good will for an employer in the position of reducing staff. Whether you have been individually terminated or impacted by a mass layoff, if you were offered severance, you may wonder whether it is worth it to negotiate.

It Is Always Worth Trying to Negotiate.

Negotiating severance when you are part of a larger reduction in force has particular challenges when compared to one-off terminations. Mass reductions are challenging because there is typically (i) a legitimate business reason for the separation; (ii) a wide mix of employees impacted from different backgrounds, ages, and other protected classes, reducing the potential for discrimination claims; and (iii) a formula by which terminations were determined.

An individual termination is typically easier to negotiate, assuming that you do not have a history of performance issues or policy violations. Being the sole employee who is getting terminated can make it feel as though you are being improperly targeted. It may even appear to be the case to others who learn of your termination. In an individual termination, more questions can be raised about protected characteristics than in a mass layoff, possibly providing you a better negotiating position.

Should You Still Try to Negotiate? Yes.

Employers offer severance to gain certainty. They look to close the loop and ensure that liability is minimized. Including a “release of all claims” clause ensures that the signatory will not later bring legal action claiming some sort of discrimination or retaliation.

If you ask for more severance, most employers will say no because they want to maintain consistency. Then will not, however, typically reduce the severance offered. They want your signature. Therefore, you have little to lose is asking for more.

For What Should You Ask?

There are many options for how to best negotiate severance. Different approaches are appropriate in different situations. For example, you could ask for (i) additional weeks or months of severance pay, (ii) a pro-rata bonus at target, (iii) a lump-sum payment for outplacement or coaching support, (iv) additional COBRA coverage or a payment in lieu thereof, (v) forward vesting or a buy-out of equity, or (vi) some other form of compensation specific to your employer. Each severance negotiation should be tailored to your employment situation and particular needs and goals.

What Is Your Leverage?

When you attempt to negotiate your package, present the ask in a non-confrontational manner that implies leverage. To do so, you must know your leverage. Even in a mass reduction, you may have been targeted because of a protected characteristic or because of a report of improper or illegal conduct. If you don’t have that type of leverage, you may have relational leverage. If you have strong relationships with influential members of the leadership team, that can be a leverage point. Whatever your leverage, plan carefully how to use it in making the ask.

How Should You Ask?

Serious negotiations are best approached directly. However, your leverage and your ask should influence the mode of your negotiation. If you are using a protected characteristic, a written request will usually be more effective. Relational negotiations work better over the phone (it’s too easy to say “no” to a friend via email).

The worst that will happen is that your employer says, “No. Take it or leave it.” In that case, take what you can, negotiate non-monetary terms, and move forward.

Or, if you really were targeted, call a lawyer.

Kristen Prinz
In Insights

Did the NLRB Just Ban Confidentiality and Non-Disparagement Agreements?

Reading Time: 3 minutes

On February 21, 2023, the National Labor Relations Board (NLRB) issued a decision in McLaren Macomb holding that confidentiality and non-disparagement provisions in severance agreements were prohibited under the National Labor Relations Act (NLRA). See McLaren Macomb, 372 NLRB No. 58 (2023). The Board found that these terms unlawfully interfered with employees’ rights under Section 7 of the NLRA to publicly discuss working conditions.

Who Is Affected?

Many people misconstrue the NLRA’s impact to be limited to union employees. In fact, the protections of the NLRA apply to most private sector employees and employers, excluding management and supervisory employees. This means that most employee separation agreements may be affected by this ruling. Even employment agreements and confidentiality agreements that contain non-disparagement terms may need to be revised as a result of the McLaren Macomb decision.

The employer in McLaren Macomb offered furloughed employees severance agreements that contained a confidentiality provision preventing the employees from discussing the terms of the agreement. The agreements also included a non-disparagement provision requiring the employees to refrain from disclosing the employer’s confidential information and from disparaging the company to employees or the general public.

Section 7 of the NLRA gives broad rights relating to employees’ ability to speak about the employer and the terms and conditions of employment with coworkers and the public. It is a violation of Section 7 for an employer to prohibit or to interfere with employees’ ability to speak about working conditions. The Board has issued rulings in the past related to employees’ social media posts and employment policies in employers’ handbooks.

What Did the NLRB Say?

In McLaren Macomb, the Board found that the employer’s offer of severance agreements containing these terms violated the NLRA. The Board held that the provisions on their face restricted employees from publicly discussing their terms and conditions of employment and otherwise exercising rights under the NLRA. Whether the employees signed the agreements was irrelevant because it was the act of proffering the agreements that violated the NLRA. The Board stated that “[a] severance agreement is unlawful if it precludes an employee from assisting coworkers with workplace issues concerning their employer, and from communicating with others, including a union, and the Board, about his employment.”

In particular, the Board did not like that the agreements’ non-disparagement provision could be read to prohibit employees from asserting that their employer had violated the NLRA in any way. It could also dissuade employees from participating in NLRB investigations into a company’s actions. Similarly, the Board found that the confidentiality clause disincentivized employees from disclosing any of their employer’s potential violations of the NLRA, filing an unfair labor practice complaint, or aiding the NLRB in an investigation. Further, the promise of confidentiality forbade employees from discussing their severance offers with past employees who had already signed the agreements or with others in the workplace interested in organizing.

This holding is an expansion of prior decisions that limited the protections of Section 7 to current employees. By restricting the terms of severance agreements, the Board is espousing a right of employees to discuss the terms of severance agreements with coworkers, whether or not such coworkers are offered similar severance terms.

What Should Employers Do?

This NLRB decision has created concern about previously executed severance agreements. The decision implied that certain carve-out language may be available to employers, meaning that non-disparagement and confidentiality provisions might still be valid under the NLRA as long as they allow for some exceptions, such as talking with other employees about the terms of the agreement. The Board, however, did not offer any specific guidance to ensure employers avoid an unintended violation of employees’ rights.

While the McLaren Macomb decision remains subject to appeal and could be vacated in the future, for now, employers must sift through the uncertainty and cautiously review their standard severance language. It would be wise to work with employment counsel familiar with employment agreements to ensure that employers are remaining compliant as this area of law is rapidly evolving.

Kristen Prinz
In Insights

Ask If You Want It

Reading Time: 2 minutes

If you don’t ask, you probably won’t get it.

Wouldn’t it be great if hard work was always rewarded? If your employer recognized your efforts? If your boss kept a list of all your accomplishments and knew how big of a raise you really deserved? If your supervisor told you exactly what was necessary for you to get promoted?

While that world may sound ideal, the reality is often different. Your accomplishments may go unseen. Your effort may not achieve impact. Performance reviews are often subjective. And obscure promotion requirements give supervisors latitude to promote—or not to.

Over the years in my work, I’ve noticed more women than men get skittish about asking for what they want. They don’t want to be seen as aggressive, greedy, bitchy, or demanding. They think they might be asking for too much, even when it might actually not be enough. Asking is exhausting. The judgment is painful. The answer is “no” anyway.

Just last week, I advised a client to ask for better compensation metrics in her agreement. “Isn’t that a bit greedy?” she responded. Another woman asked me if I thought it would be fair to ask for more severance. “Fair” is in the eyes of the beholder. Would her male colleagues be so hesitant?

As the mother of two daughters, I’ve been cringing this year as my daughters unabashedly asked for every present they can think of for Christmas. My youngest lists off a litany of varied toys. A ukulele, American Girl dolls, a blender, a cash register, a squishmallow (yes, it’s a thing). My oldest tells everyone about the different types of spyware she would like to receive. My response is predictable: “That’s rude.” “Don’t ask for so much.” “Don’t say you want all of that.” They have no shame in asking for what they want.

I’m sure I had no shame in asking for what I wanted as a child. But somewhere along the way I learned that wanting and asking are frowned upon. Being labeled demanding or aggressive is not usually looked at as a compliment, especially for a woman. But most of us don’t work with or around mind-reading bosses or colleagues. Asking for what we want is a simple and clear way to set expectations. Asking does not guarantee getting. But not asking nearly always guarantees not getting. Wishing and hoping that your work will be recognized, or your efforts appreciated, rarely works.

Start thinking about what you want in the coming year, what you are willing to accept, and how you can get more of what you want. It will almost always start with an ask. Don’t let the fear of someone else’s perception stand in the way of you achieving your goals. Highlight what you have accomplished. And ask for what you want.

Kristen Prinz
In Insights

The Impact of Restricting Mandatory Arbitration

Reading Time: 3 minutes

Employers who use arbitration agreements for their employees now face a new challenge: claims of sexual assault and sexual harassment can no longer be subject to mandatory arbitration. President Biden signed a new law amending the Federal Arbitration Act with this provision on March 3, 2022.

Arbitration is a confidential process for dispute resolution. Litigants can opt to use an arbiter, who is often a practicing attorney, instead of going to court. Employers usually believe that arbitration holds numerous benefits, but employees are not always so sure.

Most arbiters of employment law claims have spent the majority of their careers representing employers. It is difficult not to develop some implicit biases after years of perceiving employment claims primarily from one perspective. One can understand that employers and workers might view arbitration differently.

Arbitration has mainly been favored by employers for its supposed time and cost efficiencies. Proponents of arbitration argue that discovery (the exchange of documents and information that will be used as evidence in a claim) is the principal expense of litigation, and the usually more limited scope of discovery in arbitration makes the private forum more attractive than a court room.

It is true that discovery is the costliest aspect of litigation, but questionable how effective arbitration is at limiting the associated cost. Like most aspects of the legal world, much of the cost of discovery is related to the lawyers and the litigants in a matter.

The confidential nature of arbitration can also appeal to employers, enabling them to avoid the critical eye of the media and any associated reputational harm. But employees have felt that arbitration essentially allows employers to hide their misdeeds, especially when they are repeated.

Nowhere has this concern been more prominent than in the #MeToo movement and its aftermath. #MeToo revealed how confidentiality and arbitration agreements helped mask pervasive issues, particularly sexual assault and sexual harassment in the workplace. Time and time again, arbitration clauses were used to keep workplace misconduct claims quiet, enabling bad behaviors in the workplace to continue unabated. According to employee advocates, if harassment or assault in a workplace had become known, more could have been done to stop it earlier, thereby avoiding subsequent victims. After all, bad behavior thrives when it’s hidden.

Removing mandatory arbitration allows for misconduct claims to be made public. This exposure can be very impactful in terms of pressuring companies to reach a resolution with an individual. The public eye can also lead companies to course-correct and adequately address ongoing toxic workplace cultures. Further, the arbitration ban can incentivize businesses to prevent workplace misconduct before it even starts, leading to healthier workplace environments.

The new law does not enact a total ban on the use of arbitration in sexual harassment and assault cases; it merely prohibits an employer from making it mandatory. That means an employee may still opt for arbitration. Employees may have their own reasons for keeping a claim confidential, and the amended law permits them to choose this option if they desire.

Regardless of whether arbitration is an effective litigation forum for employees, the new law gives employees greater control over where a sexual assault or sexual harassment is litigated. And that control will likely impact other claims because most employee claims of sexual assault are often tied to claims of discrimination, retaliation, or other federal, state, or local claims.

An employer with a mandatory arbitration clause can decide to force some claims to arbitration while allowing others to proceed in court, but then the purported cost savings go out the window. Going forward, employers need to consider their motivations for using mandatory arbitration carefully. And, if they decide arbitration still meets their goals even with the new law, they need to make certain that their mandatory arbitration contract terms comply with the new law.

Prohibiting mandatory arbitration of sexual assault and sexual harassment claims doesn’t mean bad behaviors won’t happen, but with sexual harassment training and a true commitment to a positive workplace culture, employers can minimize bad behaviors that lead to big risk exposure.

Kristen Prinz
In Insights

Top 3 Reasons Why Women are Great Negotiators

Reading Time: 2 minutes

I’m really sick of reading how women need to change our tone or our style or our language, or anything for that matter, in negotiations. In honor of International Women’s Day earlier this week, I want to call out a bogus stereotype, that women are bad negotiators. Some of the best negotiators I know are women. And, I would bet that almost any man who is married to a woman would agree. Growing up, my mom could always get want she wanted when negotiating with my dad. Often times, he was unaware that the negotiation was even happening. Generally speaking, women negotiate differently than men, but we still know how to hold our ground.

Here are my top three reasons why women are really the best negotiators:

  1. Women are the primary drivers of the consumer economy. Women know where to get what they need in the most efficient manner. Time is truly the most valuable asset and knowing how to get what you need, when you need it, is critical to a winning negotiation.
  1. Women are caregivers. Anyone who has ever negotiated with a toddler knows what it means to negotiate with terrorists. Women are out there doing it every day. And, while there are many men who have taken up caregiving responsibilities, women have been doing it a LOT longer. It’s pretty engrained.
  1. Women talk to their friends and show vulnerability. Knowledge is power in any negotiation. It’s pretty hard to really understand your negotiating position if you’re too proud to look a little naïve in front of your friends. While, as a culture, we seem to be slowly moving towards allowing men to show vulnerability, this is another area where women have been excelling for years.

Let’s stop pretending women aren’t good negotiators. And, let’s start pushing each other to bring all of that power to work. Every day.